Home » Bankruptcy » Insolvency Service identifies problems with “volume IVA” providers

Insolvency Service identifies problems with “volume IVA” providers


Iain Ramsay


Volume providers dominate the IVA market in England and Wales. The Insolvency Service published on 26th September, 2018  a review of the monitoring and regulation of insolvency practitioners by the Recognised Professional Bodies. This included the Service shadowing monitoring visits to volume providers. The findings are troubling. Issues identified included “poor quality advice being given to debtors, potentially leading them to enter an IVA when other debt solutions may be more appropriate”, lack of clarity on ‘the justification for some charging of expenses” and “financial products being potentially mis-sold to individuals who do enter an IVA”. Yet in the majority of these cases no regulatory action was taken, even though debtors were potentially in the wrong debt solution. The Service identified some cases where a debtor’s expenses were manipulated to deliver apparent surplus income over £50 so that an IVA could be agreed, and situations of steering of individuals to an IVA when bankruptcy would be the most appropriate option. Disbursements (for items such as “PPI investigation fees” and “File/Storage fees”) have increased substantially with  ‘limited evidence that many of the disbursements charged in volume operations are providing real value to either debtors or their creditors.”   The Service also questioned the value of “early exit loans” provided by some IVA firms. They are apparently sold on the basis that they will improve a debtor’s credit rating but ‘there does not appear to be any evidence that this is actually the case’.

These findings question the effectiveness of existing regulation of volume providers and  highlight concerns about the IVA market. I have raised these in earlier blogs (here and here ) and in my evidence to the Treasury Select Committee inquiry into household savings and debt (here). Other informed observers have also questioned (here) the steering of  individuals towards an  IVA  where a DRO or bankruptcy would be more appropriate.

Clearly it is time for a public review of the role of the IVA.


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